Monday, April 22, 2024

THE ISSUE: What’s best for Sagicor


Share post:

SAGICOR FINANCIAL CORPORATION’s recent unexpected announcement that it plans to relocate its registered office from Barbados after more than 175 years has been generating debate in Barbados.

Despite its rapid expansion in the last 12 years, to the point where it now has operations throughout the Caribbean and in the United States and Latin America, many Barbadians still see Sagicor as a Barbadian company. In some ways, however, the regional financial giant is arguably recognised as a global entity, with a listing on the London Stock Exchange.

In recent days there have been fears about the intended move ever after it was confirmed by Sagicor president Dodridge Miller and other officials. Re-domiciliation is not new, although it is not a frequently broached subject here among the general populace. It involves the relocation of an entity’s registered office to another domicile – a new place of incorporation.

So that in the case of Sagicor, company officials said the status quo would remain for its various subsidiaries here including the life and general insurance companies as well as other companies like Barbados Farms Limited.

In some cases re-domiciliation is big business, with countries such as Cyprus and Malta two of the jurisdictions that in recent years have trying to get businesses to relocate their registered offices by offering various tax incentives and other inducements.

Experts in the field say there are various reasons why companies take such action, including changing circumstances in the country where there are originally incorporated. In Sagicor’s case, the company said its board of directors had made the decision after a recent downgrade from international rating agency Standard & Poors (S&P). Since Sagicor’s S&P rating is usually two notches below the country rating, it too suffered a downgrade, a fact that has provien too much for Miller and company to stomach.

The topic of re-domiciliation, otherwise called continuation, has been a controversial one of late. This is largely due to United States government concerns that a number of American companies has used the process to avoid paying their fair share of taxes. While Sagicor has made it clear that it’s decision to re-domicile is based on financial grounds – restoring its credit rating and thereby being able to “access capital for future growth”, other companies have been accused of using the process to utilise the offerings of so-called “tax havens”.

In a previous article on the issue Panama attorney Dani A. Kuzniecky said there were advantages to re-domiciliation. he said the company exercising that option would “remain in existence for all legal purposes”, “it is a quick and easy procedure”, “it gives the possibility to choose within other jurisdictions that could offer more benefits”, and “it saves costs and procedures of incorporating a new company”.

“Some of the most important offshore jurisdictions allow the re-domiciliation or continuation of a foreign company under their local law,” he said.


Please enter your comment!
Please enter your name here

Related articles

Trump hush money trial was ‘election fraud pure and simple’, prosecutors say

Donald Trump “orchestrated a criminal scheme to corrupt the 2016 presidential election” by covering up an alleged affair...

Nicki Minaj throws item back into crowd after nearly getting hit by object onstage

Nicki Minaj was left unimpressed after a fan threw an object at her onstage. In a video shared by Pop Crave on...

Tesla cuts prices in major markets as sales fall

Tesla has cut its prices again in a number of major markets - including the US, China and...

Caribbean Export boosts businesses

BUSINESSES IN Barbados were among the beneficiaries as the Caribbean Export Development Agency, which is based here, facilitated...